W!SE prep - Insurance

For the past five years, a person has had a $20,000 whole life insurance policy that has a cash value clause. The person decides to surrender the policy. At the time of surrender, the person will receive

• one-fifth of the $20,000 face value
• $20,000 less the premiums paid.
• a calculated amount of money which includes the premiums paid as well as the interest on that money.
• a calculated amount of money that must be converted to a term life insurance policy.

A woman has just received a very expensive piece of jewelry. The woman has homeowner's insurance. Which statement would it be most appropriate for her to make to her insurance agent?

• "I think I need a personal property floater."
• "I think I should get speculative risk insurance."
• "I will deduct the cost of the jewelry from my premium."
• "I realize that if this jewelry is stolen it will be considered vicarious liability."

A person buys a flat screen, plasma, theater-like television. The person has homeowner’s insurance. Why would it be appropriate to add a personal property floater to that insurance?

• To reduce the premium on the homeowner’s insurance.
• To protect the person who owns the television from liability for damages
• To show the insurance company a good faith investment has been made.
• To cover the cost of replacement should the television get damaged or stolen.

The only type of life insurance that does not develop a cash value is:

• Term life insurance
• Whole life insurance
• Universal life insurance
• Variable universal life insurance

Which statement does NOT accurately describe a characteristic of cash value for whole life insurance?

• Cash value grows gradually over time
• If the policy is cancelled, you may be entitled to some or all of the accrued cash value
• Policy that accumulates cash value is less expensive than a policy that does not accumulate cash value
• When an insured person dies, the beneficiary will receive the death benefit but the insurance company keeps the cash value

When Jessie needs health care, she must first go to her primary care physician who coordinates her care and decides whether Jessie should see a specialist. Jessie pays $10 as the co-pay when she sees her primary care doctor. Jessie has which type of health insurance?

• Fee-for-service health plan
• Managed care health plan
• Medicaid health plan
• Comprehensive health plan

Sally's health insurance policy requires her to pay the first $500 of medical costs each year before the company will pay any of her medical bills. This policy provision is the:

• Co-insurance clause
• Premium
• Annual deductible
• Major medical benefit

Ben's truck is crushed by a hit-and-run driver. Scott is hit by an uninsured driver. How will they receive payments?

• State motorist coverage
• Uninsured or no-fault motorist coverage
• Insolvent motorist coverage
• Auto liability coverage

Insurance is frequently described as a method of "sharing the risk" because the

• Risk of loss is shared with the insurance company sales person
• Insured shares the risk of loss with all the other policy holders
• Insured can share the risk by spreading the cost over a number of years
• Risk of loss is shared with the government

Neil will be traveling by air in Southeast Asia for a six-week vacation. Which step will not provide protection during the trip?

• Buy baggage claim insurance
• Take his passport
• Buy flight insurance
• Buy medical insurance that covers him when he travels internationally